The most important investment of any company is in their Human Capital. We’ve all known this for a long time, but 1) we pay it lip service more often than we try to do something about it, and 2) it’s true more now than ever.
The rise of technology and the information age has resulted in more companies that compete based primarily on their people. This isn’t only true for technology companies like Facebook and Google; as software continues to eat the world and the pace of business increases, nearly all companies will live and die by their continual ability to innovate.
Despite the fact that most organizations know that their long term advantage resides in their people, most companies don’t think critically about how to increase employee retention.
In this post, Jack Altman, CEO of Lattice argues that the core reason people don’t think about employee retention seriously enough is because they don’t know how to measure the impact. Showing frameworks on how turnover is represented by dollar value and then suggests actionable ideas on reducing turnover in your company.
The problem with not measuring employee turnover
Employee turnover is expensive.
People instinctively sense this; we’ve all felt the pain of a superstar leaving, the cultural challenge associated with the departure of a beloved employee, or even just the painful gap that is left behind by an employee who was doing an important job well.
But most people have no framework for quantifying this cost, or they never even bother to try.
The problem with this is that people tend to optimize what they can measure. Doctors believed that cigarettes were bad for human health as early as the 18th century, and scientific studies about the link between smoking and lung cancer started surfacing in the medial literature as early as the 1920s. Even though people generally knew cigarettes were bad for you, it wasn’t enough, and smoking in America surged dramatically during the first half of the 20th century.
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